Vol. 171.

Company of Iowa, in which action E. H. |derstanding or agreement between the syndiHubbard as assignee of the Union Loan & cate and the company that the syndicate Trust Company filed an intervening petition should deposit with the company, as collatagainst J. Kennedy Tod & Co., and the de- eral security for said notes, the stock and eree of the Circuit Court authorized the re- bonds of the Sioux City & Northern Railway demption of certain securities by the inter- Company when issued; that the syndicate vener on payment to Tod & Co. of a certain caused the corporation to issue the mortgage sum with interest. Affirmed. described in the original bill; and that the bonds and stock of the corporation were held by the company "as collateral security for the payment of the notes with the proceeds whereof the said railroad has been constructed and equipped as aforesaid."

See same case below, 65 Fed. Rep. 559.

That afterwards the syndicate lent its aid to the Wyoming-Pacific Improvement Company, a Wyoming corporation engaged in the construction of the Nebraska & Western Railroad, a line of road extending westward from Sioux City to the town of O'Neill, in the state of Nebraska, and that said syndicate also extended its aid and assistance to other cor

Statement by Mr. Chief Justice Fuller: The Manhattan Trust Company of New York filed its bill, on September 28, 1893, in the circuit court of the United States for the northern district of Iowa, against the Sioux City & Northern Railroad Company 175] of Iowa, praying for the appointment of a receiver to take possession of the railroad and its properties and to operate and preserve the same, under and by virtue of the terms of a trust deed made and executed by the Sioux City & Northern Railroad Com-porations in and about Sioux City, such as pany to the Manhattan Trust Company, January 1, 1890, to secure an issue of bonds to the amount of $1,920,000.

the Pacific Short Line Bridge Company, the
Union Stock Yards Company, the Sioux City
Terminal Railroad & Warehouse Company,
and the Sioux City Dressed Beef & Canning
Company, with a like understanding between
the syndicate and the Union Loan & Trust
Company that the securities of the respect-
ive companies coming into the possession of
the syndicate should be deposited with the
Union Loan & Trust Company as collateral
to the notes which the members of the syndl-
cate might give to that company on behalf of
the enterprises respectively.

October 5, 1893, receivers were appointed, and on the same day E. H. Hubbard, as assignee of the Union Loan & Trust Company, a corporation of Iowa, filed in said cause an intervening petition against the members of the banking firm of J. Kennedy Tod & Co. of New York, praying in respect of 10,600 shares of the capital stock of the Sioux City & Northern Railroad Company, and $2,340,000 in first-mortgage bonds of the Sioux City, O'Neill, & Western Railway Company, a corporation of Nebraska, held by J. Kennedy Tod & Co., an injunction against the disposition thereof, an accounting of what sums J. Kennedy Tod & Co. had advanced in good faith on said securities, and the surrender by them of the collateral to the intervening pe-braska Company. titioner on the ascertainment of the suns so advanced and constituting a lien thercon.

And also that the syndicate organized the corporation known as the Pacific Short Line Bridge Company to construct a bridge across the Missouri River at Sioux City for the purpose of connecting said railroads, the stock of said company to belong to the Ne

It was further averred that the syndicate acquired the ownership of all the bonds of J. Kennedy Tod, W. S. Tod, and Robert the Nebraska & Western Railway Company, S. Tod, composing the firm of Tod & Co. ob- and that they became subject to the lien of jected to the jurisdiction, but answered No- the Union Loan & Trust Company; yet that vember 16, 1893, and about the 1st of Janu- A. S. Garretson, *on or about October 1, 1891, [477] ary, 1894, petitioner filed an amended peti- without any apparent record or other authortion, to which defendants filed a supplement-ity from the Union Loan & Trust Company, al answer, and petitioner, a replication. I caused all of the Nebraska & Western bonds The intervening petition and amendments and 7,200 shares of Sioux City & Northern averred that the Union Loan & Trust Com- Railroad stock to be transferred to Tod & Co. pany was a corporation of the state of Iowa, as security for a loan of one million dollars, organized in the year 1885, and thereafter but that Tod & Co. were chargeable with engaged in carrying on a loan and trust busi- notice of Garretson's want of authority. ness up to and until April 25, 1893, when it made general assignment of all its property and assets to E. H. Hubbard of Sioux City, Iowa.

That the Nebraska & Western Railway was built by the Wyoming & Pacific Improvement Company, which was practically owned and controlled by the Manhattan Trust Company, and that the improvement company received stock and bonds of the Nebraska & Western Company, and delivered them to the Manhattan Trust Company, by which they were pledged, or held in trust, as security for loans negotiated and advanced by it to the improvement company, including a loan of $500,000 by Belmont & Co., all of which were outstanding when, on November 1, 1890, the improvement company collapsed, to the knowledge of Tod & Co.

That on July 3, 1889, A. S. Garretson, John Hornick, J. D. Booge, Ed. Haakinson, and D. T. Hedges entered into an agreement in writing, referred to as a railroad syndicate agreement, for the construction of the Sioux City & Northern Railroad, which construction was proceeded with and from time to time the individual members of the syndi[476]cate executed and delivered their respective notes to the Union Loan & Trust Company in various sums, which notes that company sold to various bankers and brokers throughout That to relieve itself from impending loss, the United States; that there existed an un- the Manhattan Trust Company, by untruth

and that a joint and several money judgment | defendants and overruled, when answers were [443]be entered against them for the sum of $400, filed denying in general the allegations of the 000, with legal interest thereon from the time of such loss.

The defendants answered the bill, denying the allegations as to negligence on their part. Upon the cause being submitted to the court, a judgment was "entered in favor of the plaintiff and against Richard P. Thomas, Robert R. Thompson, and Robert A. Wilson," and the case was referred to a master, who found the actual loss of the bank to be $166,919. Before a final judgment was rendered by the court, however, the suit was dismissed by the plaintiff as to Robert R. Thompson and Robert A. Wilson, from whom had been collected the sum of $27,500, thus leaving a net loss to the bank of $139,419, and judgment for this amount was rendered against Richard P. Thomas.

Thereupon, Thomas appealed to the supreme court of the state of California, by which court the judgment was reversed, and the case remanded to the trial court, with directions to enter a judgment in favor of the defendant Thomas. (113 Cal. 414.)

The plaintiff thereupon sued out a writ of error to this court, assigning as the principal ground to give this court jurisdiction that the judgment of the supreme court of the state was rendered without due or any process of law, and deprived the plaintiff of its property without due process of law, contrary to the Constitution, etc., and Revised Statutes, 5136, relating to national banks.

bill. The court subsequently entered judgment against the three directors, but, being unable to determine the proper amount, appointed a referee to take proof of the amount appearing to be due and owing to the bank from certain named individuals. Upon such report having been made, a stipulation was entered into between the plaintiff stockholder and the defendants Thompson and Wilson, whereby the plaintiff renounced and withdrew his action against such defendants, and the court, upon such stipulation, entered a judgment dismissing the action against them. The court thereupon made a finding of all the facts in the case, among which was one to the effect that there had been collected of the two defendants Thompson and Wilson the sum of $27,500, leaving a net loss to the bank of $139,419, for which judgment was entered against the defendant Thomas. Thomas thereupon appealed to the supreme court of the state from the judgment so entered.

*That court was of opinion that the com-[445] plaint, though entitled "a bill in equity for the accounting and settlement of a trust," contained nothing more than a charge ex delicto against the directors for a breach and nonperformance of their duties. It did not consider it necessary to dispose of the objections to the complaint; but assumed, without deciding, that the complaint was sufficient to state a cause of action in its averments of misconduct. It then proceeded to decide (1) that the complaint was one sounding in tort, and that the defendants were charged as joint tortfeasors; that their negligence was pleaded as their joint neglect to perform duties, not individually imposed members of the executive committee; that in upon them, but collectively undertaken as the findings of fact no mention was made of Unless the plaintiff in error was denied any dereliction of duty on the part of Thompsome right under the Constitution or stat-son and Wilson, and that there was an absoJutes of the United States, "specially "set up and claimed" by it, this writ of error must be dismissed.

Messrs. Robert Rae, E. G. Knapp, and John Chetwood, Jr., for plaintiff in


Mr. A. H. Ricketts for defendant in er


Mr. Justice Brown delivered the opinion of the court:

lute failure by the court to find upon the most material issues of the case-the joint negligence of the three defendants, which The bill of complaint, filed in the superior alone, it was alleged, had occasioned loss to court of San Francisco by a stockholder of the bank. "Such," said the court, "is the the California National Bank, sought to cause of action pleaded in the complaint. charge three directors of the bank with neg-The findings, if it be conceded that they give ligence in the performance of their trust, evidence of a meritorious cause of action and particularly in failing to comply with against the defendant Thomas, do so because certain by-laws of the bank, by which large of a showing that he was negligent, not with amounts of money were lost to the bank, the other defendants and as member of the which the bill prayed that the defendants executive committee, but that he was individmight be decreed to make good and restore. ually and separately negligent in the perThe bank was chartered under the national formance of his duties as president. But banking act and the by-laws were adopted this is not the cause of action pleaded against in pursuance of Revised Statutes, section him, and it is well settled that, where the 5136, which authorizes associations in-case made out by the findings is a different corporated under the act to define the duties case from that presented by the pleadings, of the president and other officers and to reg- the judgment will be reversed; for the relief ulate the manner in which its general busi- decreed must be the relief sought, and a vaness shall be conducted. Certain transac- riance, even if it be such as could have been tions of the directors are also alleged to be cured by amendment, is fatal to the validity infractions of Revised Statutes, section 5200, of the judgment." The court further held for which the directors are made liable in (2) that, as the defendants in error were section 5239, although no violations of this sued jointly for a tort, a withdrawal of the section are specifically alleged in the bill. action in favor of Thompson and Wilson operated also to release the defendant Thomas.

Demurrers were interposed by the several

This was in fact the main reason given for

its conclusion. The court thereupon ordered
the judgment to be reversed, and the cause
remanded with directions to enter judgment
in favor of the defendant Thomas.

State of California to review a decision of that court reversing an order made by the Superior Court of the City and County of San Francisco denying a motion to require the plaintiff Chetwood to appear and show cause why moneys collected of defendants Thompson and Wilson and certain stock and other securities should not be turned over to Thomas K. Stateler as agent of the stockholders of the California National Bank and directing the trial court to enter the order prayed for, after allowing plaintiff for his costs, etc. On motion to dismiss. Dismissed. See same case below, 113 Cal. 649.

ERROR to the Supreme Court of the

[446] *In all this record there was no Federal
right specially set up or claimed by the
plaintiff in error until after the judgment in
the supreme court, when a petition for writ
of error was filed by the California National
Bank, a codefendant with Thomas in the
original action, in which various allegations
were made of a denial of Federal rights. But
assuming that a Federal question might be
extorted from the allegations of the com-
plaint, it is sufficient to say that the case
was not disposed of upon the merits of such
complaint, which was treated as sufficient,
Statement by Mr. Justice Brown:
but upon a variance between its allegations
This was an intervening petition by State-
and the proofs, and upon the settlement made ler in the case just decided of the California
with the defendants Thompson and Wilson, National Bank v. Thomas [ante, 231] to ob-
and the withdrawal of the action against tain the possession of the sum of $27,500
them. These were purely questions under paid to the plaintiff Chetwood by the de-
the law of the state, as to which the opinion
of the supreme court was conclusive. Not
only was no suggestion of a Federal question
made to the trial court or to the appellate
court, but there was nothing to indicate that
the judgment rendered could not have been
given without deciding a Federal question.
Indeed, the opinion shows that the cause
was decided, as it might well have been,
solely upon grounds not involving such ques-


Whether a judgment should be ordered in favor of Thomas for a dismissal of the action against him or simply for a new trial, involved merely a question of the procedure under the law of the state. The court might have been, and probably was, of the opinion that an action would lie upon the separate liability of Thomas, and have reserved for future consideration the question whether the dismissal of this action upon a joint liability would operate as estoppel against a new action upon his individual liability.

There was no Federal question involved in the disposition of this case, and the writ of error is therefore dismissed.

[447] CALIFORNIA NATIONAL BANK et al., Plffs. in Err.,



(See S. C. Reporter's ed. 447–449.)

What is not a final order.

fendants Thompson and Wilson in the settle-
ment of the suit of Chetwood against them

as codefendants with Thomas.

Pending the insolvency and winding-up proceedings of the California National Bank, and subsequent to the appointment of a receiver by the Comptroller of the Currency, the petitioner Stateler was elected "agent" by the stockholders pursuant to the act of Congress of August 3, 1892 (27 Stat. at L. 345). As this act provided that the person so elected agent "shall hold, control, and dispose of the assets and property of such association which he may receive under the terms hereof, for the benefit of the shareholders of such association," Stateler applied by affidavit to the superior court of the city and county of San Francisco, in which the Chetwood action was then pending, for an order upon the plaintiff Chetwood to appear and show cause why the moneys collected of Thompson and Wilson, as well as certain stock and other securities, should not be turned over to the affiant as such_agent.

The motion was opposed upon the ground that of the whole number of 2,000 shares, 1,020 shares only were voted to elect Stateler as agent of the bank, and that they were either owned or controlled by Richard P. Thomas, the former president, against whom there was a judgment outstanding in *favor [448] of the stockholders in the amount of $139,419, besides an unpaid assessment of $20,000 levied upon him as a stockholder by the Comptroller of the Currency.

Upon affidavits read at the hearing of the motion the court denied the order prayed for, whereupon Stateler appealed to the supreme court of the state. That court held that the An order directing the trial court to enter regularity of the appointment of the agent an order for turning over certain moneys and could not be questioned in a proceeding of this securities received from certain persons, aft-kind, inasmuch as it had been approved by er making reasonable allowances for "costs, the Comptroller of the Currency, and that

disbursements, and attorneys' fees" as con-
templated by law, is not a final order for the
purpose of a writ of error.

[No. 37.]

the agent's demand to have the money paid over to him should have been granted. The court thereupon reversed the order "with directions to the trial court to enter the order prayed for, after making reasonable allow

Submitted May 4, 1898. Decided October ance to the plaintiff Chetwood for his costs,

17, 1898.

disbursements. and attorney's fees in said

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